Correlation Between Mycron Steel and Malaysia Steel
Can any of the company-specific risk be diversified away by investing in both Mycron Steel and Malaysia Steel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mycron Steel and Malaysia Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mycron Steel Bhd and Malaysia Steel Works, you can compare the effects of market volatilities on Mycron Steel and Malaysia Steel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mycron Steel with a short position of Malaysia Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and Malaysia Steel.
Diversification Opportunities for Mycron Steel and Malaysia Steel
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mycron and Malaysia is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and Malaysia Steel Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaysia Steel Works and Mycron Steel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mycron Steel Bhd are associated (or correlated) with Malaysia Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaysia Steel Works has no effect on the direction of Mycron Steel i.e., Mycron Steel and Malaysia Steel go up and down completely randomly.
Pair Corralation between Mycron Steel and Malaysia Steel
Assuming the 90 days trading horizon Mycron Steel Bhd is expected to generate 1.26 times more return on investment than Malaysia Steel. However, Mycron Steel is 1.26 times more volatile than Malaysia Steel Works. It trades about 0.01 of its potential returns per unit of risk. Malaysia Steel Works is currently generating about 0.0 per unit of risk. If you would invest 42.00 in Mycron Steel Bhd on August 28, 2024 and sell it today you would lose (3.00) from holding Mycron Steel Bhd or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mycron Steel Bhd vs. Malaysia Steel Works
Performance |
| Timeline |
| Mycron Steel Bhd |
| Malaysia Steel Works |
Mycron Steel and Malaysia Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mycron Steel and Malaysia Steel
The main advantage of trading using opposite Mycron Steel and Malaysia Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, Malaysia Steel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Malaysia Steel will offset losses from the drop in Malaysia Steel's long position.The idea behind Mycron Steel Bhd and Malaysia Steel Works pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Malaysia Steel vs. Mercury Industries Bhd | Malaysia Steel vs. PMB Technology Bhd | Malaysia Steel vs. Mycron Steel Bhd | Malaysia Steel vs. Choo Bee Metal |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |